Reference no: EM133012090
Question - Recording Long-Term Construction: Recognize Revenue at a Point in Time and Over Time Smith Construction contracted with a developer to build an apartment building with retail space for $3,000,000.
Information relating to this contract follows.
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2020
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2021
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2022
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Costs Incurred to Date:
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1,180,000
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2,330,000
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3,150,000
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Esitmated Cost for Completion:
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1,320,000
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720,000
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0
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Customer Billings to Date:
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1,000,000
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2,000,000
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3,000,000
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Customer Collections to Date:
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750,000
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1,750,000
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3,000,000
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Required -
a. Provide the 2020, 2021, and 2022 journal entries assuming revenue is recognized at a point in time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, and (4) losses, revenues and expenses.
b. Provide the 2020, 2021, and 2022 journal entries assuming revenue is recognized over time. Provide entries for (1) construction costs incurred, (2) progress billings, (3) cash collections, (4) revenues and expenses, and (5) to close out accounts upon completion of the contract.